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TMI Blog2023 (4) TMI 436X X X X Extracts X X X X X X X X Extracts X X X X ..... d. Consultancy Services - HELD THAT:- The appellant provides consultancy services to contractors and power DISCOMS while laying the power or electricity transmission lines, erection of electricity poles and construction of electricity sub-stations. The appellant collects the amount for consultation services which are incidental to the transmission activities as the appellant has the expertise in power transmission. If the poles, lines or sub-stations are not erected or constructed as per the specifications, it will not be possible to transmit electricity. The issue that arises for consideration is as to whether service tax could be levied on the amount collected by the appellant towards consultancy charges. This issue was examined ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the Board, observed that no service tax can be levied on the amount collected towards liquidated damages or penalty for breach of any of the terms of the contract. Manpower Recruitment Services - HELD THAT:- The contention of the appellant that most of the service providers were public limited or private limited who discharge their own liabilities was not accepted as the appellant could not substantiate this contention with documents. Learned counsel for the appellant has also not placed any material to substantiate this contention. There is, therefore, no error in the order passed by the Commissioner confirming the demand on service tax under manpower supply services. Legal Services - HELD THAT:- In regard to confirmation of s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lant is required to erect or construct electric sub-stations, electricity poles, electrical lines, provide consultation for transmission of electricity from one point to another, transmit electricity from the power grid or dams or power generation area to the city limits or to the customers. 3. A show cause notice dated 10.08.2018 was issued to the appellant for the period 2013-2014 to 2016-2017 alleging that : i. The appellant had provided consultancy services by deploying its engineers to the contractors for assisting them and the amount of service tax proposed under this head would be Rs. 3,07,99,560/-; ii. The appellant was required to pay service tax on the required damages/ penalties recovered by the appellant from the contra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing that the appellant was liable to pay service tax on manpower recruitment services and legal services. 6. Dr. Radhe Tallo, learned authorized representative appearing for the department pointed out that for the manpower recruitment service and legal services the appellant could not substantiate the factual aspects and so the Commissioner was justified in confirming the demand. 7. The submissions advanced by learned counsel for the appellant and the learned authorized representative appearing for the Department have been considered. 8. Each of the heads under which service tax has been confirmed will be dealt with separately. CONSULTANCY SERVICES 9. The appellant provides consultancy services to contractors and power DISC ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ngle service of transmission and distribution of electricity, which service is exempted from payment of service tax. 11. In the present case the amount collected towards consultation services is in connection with services which are incidental to the transmission activities carried out by the appellant. The demand, therefore, cannot be sustained in the view of the aforesaid decision of the Tribunal. LIQUIDATED DAMAGES 12. The second issue that arises for consideration in this appeal is relating to the amount collected by the appellant towards liquidated damages or penalty. This issue was also examined by the Division Bench of the Tribunal in Madhya Pradesh Poorva Kshetra Vidyut Vitaran Company Ltd. decided on 12.04.2022 and after ..... X X X X Extracts X X X X X X X X Extracts X X X X
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